Why do companies continue making tens of thousands of mergers and acquisitions (M&As) each year when researchers predict 70 and 90% of them will fail? To better understand this discrepancy between research and practice, Daniel Haws, DBA ’22, identifies the limitations of the metrics academics use to measure M&A transactions—such as Cumulative Abnormal Returns (CAR) and Return on Assets (ROA).

Haws finds that none of the firms interviewed are aware of CAR and none use CAR or ROA for acquisition assessment. Instead, firms tend to define their own metrics of M&A success based on how the transaction achieves the company’s unique strategic goals.

These findings encourage academics to look beyond CAR and ROA when evaluating M&A outcomes. Researchers and managers can benefit through partnership by creating holistic, multi-faceted assessments accounting for the firm’s strategic goals.